Attorney General Ellison secures Assurance strengthening governance of first-responder charity
Charity engaged in conflicted transactions and other governance violations
December 1, 2023 (SAINT PAUL) -- Minnesota Attorney General Keith Ellison today announced the filing of an Assurance of Discontinuance with the Minnesota 100 Club related to past governance violations by its Board of Directors. The Minnesota 100 Club provides charitable assistance to the families of first responders seriously injured or killed in the line of duty. The Assurance alleges that the Minnesota 100 Club entered into conflicted transactions with certain board members without ensuring the terms were in the best interest of the organization, among other governance deficiencies.
The Minnesota 100 Club voluntarily complied with a Charities Division investigation in revealing that the organization engaged in related-party transactions without having proper policies or procedures or otherwise taking affirmative steps to determine whether these transactions were fair and reasonable. The investigation further revealed that the alleged violations were the result of general governance deficiencies at the Minnesota 100 Club. Notably, the investigation also found that the Minnesota 100 Club voluntarily ended one of the conflicted transactions after they were advised by counsel of the legal risks it presented.
Under the terms of an Assurance of Discontinuance filed in Ramsey County District Court, the Minnesota 100 Club will conduct a review of its governing documents, policies, and procedures and create those necessary to address any deficiencies and protect the organization’s assets. The Minnesota 100 Club will also be required to adopt written conflict of interest and vendor contract management policies as well as conduct regular board and committee meetings and reporting. Minnesota 100 Club directors and officers will also be required to undergo training on their duties as nonprofit directors and officers under Minnesota and federal law.
“The Minnesota 100 Club serves a tremendously important mission—helping the families of injured or killed first responders,” Attorney General Ellison said. “Organizations that serve the families of those who have sacrificed so much for our state should be held to the highest standards. The Minnesota 100 Club failed to take necessary steps to ensure that transactions with board members were in the best interests of the corporation and did not present any conflicts of interest. By agreeing to voluntarily change their governance practices, the 100 Minnesota Club will be in a far better position to serve the families of our first responders going forward. I am grateful for the Minnesota 100 Club’s cooperation in this investigation and I wish them well moving forward.”
The Assurance does not allege fraud or criminal wrongdoing. The Attorney General’s Office’s Charities Division launched this investigation under Minnesota’s civil nonprofit corporation and charitable trust laws, which require nonprofit directors and those who hold charitable assets to adhere to strict governance standards and fiduciary duties. In Minnesota, the Attorney General has civil, not criminal, enforcement authority over the state’s nonprofit corporation and charitable trust laws. Under state law, nonprofit executives owe fiduciary duties to act in the best interests of the charities that they serve, including putting the interests of the nonprofit above any personal financial interests.
The Minnesota Attorney General’s Office makes available a number of publications and pamphlets providing information about charitable organizations, charitable trusts, professional fundraisers, and nonprofit organizations generally:
- “A Guide to Minnesota’s Charities Laws” discusses key laws including the Minnesota Nonprofit Corporation Act, the Charitable Solicitation Act, and the Supervision of Charitable Trusts and Trustees Act, among other laws that require certain organizations to register with and provide notice to the Minnesota Attorney General’s Office.
- “Guide for Board Members” covers fiduciary duties of directors of nonprofit corporations and is meant to assist board members with the important responsibilities they assume when elected to a charity’s board of directors.
- “Nonprofit Organization Resources” contains a listing of resources covering charitable solicitation, professional fundraiser, and charitable trust registration, government agency contacts, and training and technical assistance providers.
You may submit complaints about similar situations using an online complaint form on the Attorney General’s website at www.ag.state.mn.us/Office/Complaint.asp. For additional information, you may also contact the Attorney General’s Office, as follows:
